Mukul Agrawal Portfolio Stock Has 20% Potential Upside For Rs 2960 TP; Buy This Week?

As of Friday's closing session, Ethos Ltd., a small cap company in the consumer discretionary category, has a market valuation of Rs. 6,012.40 Cr. Founded in 2003, Ethos Ltd. stands as one of the largest sellers of high-end and luxury watches in India. The firm offers more than sixty premium and luxury watch brands, forty-six of which are exclusive names that can only be found at Ethos. In the Certified PreOwned (CPO) luxury watch sector, Ethos is a world leader. Additionally, the company is diversifying into fast-growing luxury markets, such as Messika and Bvlgari jewellery, Rimowa luggage, and Rimowa luggage. The brokerage firm HEM Securities is bullish on the stock for a target price of Rs 2960 representing a potential upside of 20% from its current market price of Rs 2456.

Ethos Management Commentary

"Demand from Tier 2 and Tier 3 cities is strong and expected to continue for the next few years. The ASP for the quarter was Rs 1,86,533 in 9MFY24, compared to 1,59,476 in FY23. The growth in ASP is due to increased sales of high-priced products. The corporation is transitioning away from the low-cost watch category. Diversifying into rapidly increasing premium areas, including Rimowa luggage and Messika and Bvlgari jewellery. Rimowa achieved profitability in Q3FY24, despite the store only being open for three months. The company aims to open two more stores in Delhi and Bangalore, with a sales target of Rs 20 Cr each outlet. Rimowa achieved profitability in Q3FY24, despite the store only being open for three months. The company aims to open two more stores in Delhi and Bangalore, with a sales target of Rs 20 Cr each outlet," said HEM Securities in a note.

Ethos Management Guidance

"Expect to open 25 new boutiques by the end of the next financial year. Introduction of new and scaling up existing exclusive brands portfolio. Gradual expansion of CPO and new categories - Luggage (Rimova) and Jewellery businesses. With ambitious expansion goals based on new collaborations, Ethos wants to increase its exclusive mix from approx 30% to approximately 45% by FY26," the brokerage firm added in a note.

Ethos Share Price Target

"Ethos plans to add 100 stores over the next 5 years, with 15-17 stores already in the pipeline for FY25 at two luxury destinations. Sustained high demand for luxury and premium watches, expanding footprint in Tier 2/3 Cities. Diversification into fast-growing luxury segment - Luggage and Jewellery and CPO Segment. We value the company at 66x FY25 EPS to arrive at the target of 2960," HEM Securities said in a report.

Mukul Mahavir Agrawal Stake In Ethos

As per the shareholding pattern of Ethos available on BSE for the quarter ended December 2023 or Q3FY24, ace investor Mukul Mahavir Agrawal held 6,40,000 equity shares of the company in his portfolio which is 2.61% of the total paid-up share capital of Ethos.

Disclaimer

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